Business Management Paper

Discussion:

Topic: Pricing and Advertising Products and/or Services

You will be reviewing how to set your pricing for your product or service based on breakeven analysis, pricing practices, credit policies, and advertising strategies as they affect your small business and the people with whom you do business. You learned about all of these concepts in your Reading and practiced with these concepts in your Learning Activity. Now you have a chance to apply them to the business you are developing throughout this course.

Perform a breakeven analysis for two services or products you will be offering in your business. Identify at least two advertising options that would best fit the needs of your small business, making sure to explain why these options would work particularly well for you.

· Provide your breakeven point for two (2) services or products.

· Then discuss how this analysis affects how you will price the services or products.

· Identify at least two (2) advertising options and defend your choices.

Discussion Topic: Projecting Profits and Losses

Please make sure you have had sufficient review time in the Learning Activity this week to better understand the concepts you will use in both this Discussion and in the Assignment.

Consider the small business you have focused on in earlier units and consult Course Documents for additional help in projecting monthly sales. Project your monthly sales, and then take a guess about what your expenses are going to be for that same month. Do not forget things like rent, utilities, supplies, inventory, salaries, and pay and profit for you.

Use the Unit 9 Spreadsheet Template (Excel file). 

Using the template, you will insert your sales, and then you will subtract your major expenses (remember, these are all just guesses, or projections). The template will do the math for you by subtracting the expenses from the sales for a net profit before taxes. This is a simple profit and loss statement. There is more to a real one than can be seen in your work here, but it is a start to being able to understand one of the ways to analyze your finances for a month’s time. You do not need to submit or share your spreadsheet, but make sure to refer to it as you respond to the following:

· What are some of the main discoveries you made about your business’s monthly profit and loss potential as you completed the spreadsheet?

· What questions do financial ratios help answer about a firm’s financial performance? What ratios might be of more interest to certain stakeholders and why?

Discussion Topic: Financing and Credit

In the beginning of a business, and over time, you may need to borrow money for a short time (revolving credit or short-term loans), or a long time (a mortgage or an equipment loan, for example).

· Given your profit and loss projection from last week, do you anticipate needing to borrow money for any reason? Keep in mind the seasonality of your company. You might make a lot of money in the winter and have essentially no business in the summer — think of how that is true for a ski resort, for example.

· If you foresee having to use someone else’s money, how do you anticipate getting that? Discuss using both debt and equity financing. Also think about how you can use other people’s money (such as suppliers). Be sure to address any bootstrapping measures you might take.

· Even if you plan to keep your business small, imagine what you would need to do if you wanted to grow. This exercise requires you to use your imagination. The only wrong answer for these discussion purposes will be if you state you do not need money now and never will. Even if that is true, imagine what you would do if you did need it.